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beginning of the end of the US $

Recent trade deals and high-level cooperation between Russia and China have set off alarm bells in the West as policymakers and oil and gas executives watch the balance of power in global energy markets shift to the East, and a serious threat to the US dollar.
The reasons for the cozier relationship between the two giant powers are, of course, rooted in the Ukraine crisis and subsequent Western sanctions against Russia, combined with China’s need to secure long-term energy supplies, Business Intelligence Mideast reported.
However, a consequence of closer economic ties between Russia and China could also mean the beginning of the end of dominance for the US dollar, and that could have a profound impact on energy markets.

Rein of the $
Before the 20th century, the value of money was tied to gold. Banks that lent money were constrained by the amount of their gold reserves. The Bretton Woods Agreement of 1944 established a system of exchange rates that allowed governments to sell their gold to the US Treasury. But in 1971, US President Richard Nixon took the country off the gold standard, which formally ended the linkage between the world’s major currencies and gold.
The US dollar then went through a massive devaluation, and oil played a crucial role in propping it back up. Nixon negotiated a deal with Saudi Arabia whereby in exchange for arms and protection, the Saudis would denominate all future sales of oil in US dollars. Other OPEC members agreed to similar deals, ensuring perpetual global demand for greenbacks. The dominance of the US “petrodollar” continues to this day.

Russia and China
Recent news coming out of Russia, however, suggests that the era of US dollar dominance could be coming to an end, due to increasing competition from the world’s second largest economy and primary consumer of commodities, China.
China and Russia have been furiously signing energy deals that indicate their mutual energy interests. The most obvious is the $456 billion gas deal that Russian state-owned Gazprom signed with China in May, but that was just the biggest in a string of energy agreements going back to 2009. That year, Russian oil giant Rosneft secured a $25 billion oil swap agreement with Beijing, and last year, Rosneft agreed to double oil supplies to China in a deal valued at $270 billion.

Sanctions
Since Western sanctions against Russia took hold in reaction to the Russian land grab in Crimea and the shooting down of a commercial airliner, Moscow has increasingly looked to its former Cold War rival as a key buyer of Russian crude – its most important export.
Liam Halligan, a columnist for the Telegraph, says “the real danger” of closer Russian-Chinese ties is not a bust-up between China and the U.S., which could threaten crucial shipping routes for China-bound coal and LNG, but its impact on the US dollar.
“If Russia’s ‘pivot to Asia’ results in Moscow and Beijing trading oil between them in a currency other than the dollar, that will represent a major change in how the global economy operates and a marked loss of power for the US and its allies,” Halligan wrote in May.
“With China now the world’s biggest oil importer and the US increasingly stressing domestic production, the days of dollar-priced energy, and therefore dollar-dominance, look numbered.”